Executive Summary

President Obama and Members of Congress have offered numerous proposals to create new federal regulations to require employers to provide workers with specific leave benefits. One such proposal, the Healthy Family Act, would mandate that employers must provide seven days of paid sick leave.

Everyone understands the appeal of paid leave benefits, which is why most employers already offer paid leave to their employees. Yet these benefits entail real costs, and a government mandate would have several important unintended consequences for employees and the economy.

A new paid leave mandate would raise employment costs, which would discourage job creation-a particularly unwelcome development during our current climate of rising unemployment and stagnating economic growth. Many workers would also likely see their take-home pay reduced as a result of the increased cost of providing the new benefit. The American workforce would be less flexible and workers would have fewer options in terms of employment arrangements. Not all employees or employers would be equally affected. Small businesses, part-time workers, and low-income workers would be most likely to bear the costs associated with the new mandate.

This is the wrong direction for the U.S. economy. Policymakers can better advance workers’ interests by embracing policies that encourage growth and allow a dynamic, flexible workforce that will provide workers with a wide range of employment options.